It’s no secret that businesses come and go. While some can thrive for decades or even generations, others are forced to close operations much sooner than anticipated. While this can be a heart-wrenching time for business owners, they need to make sure that they dissolve their businesses in a legally sufficient way. Otherwise, they may wind up with even bigger headaches down the road.
The first step in winding down a business is to look at any existing bylaws that may speak to how to dissolve the business in question. Unless the business is a sole proprietorship, the agreement of other parties, whether they be partners or shareholders, will likely have to be obtained before closing up shop. Once this step is cleared, then it is time to notify the state that the business will be dissolving and cancel any business licenses that are in place.
After that, business owners will need to contact people who may be looking for money. This includes the IRS, local tax authorities and creditors. There are very specific ways that creditors must be notified, so business owners will need to make sure they are in compliance with the in this respect. Once creditors have been notified, any outstanding debt must be settled in one way or another, although a business owner may be able to use the law to his or her advantage to avoid paying some debts. Collecting money owed to the business can also help alleviate some of the remaining debt burden. After these steps are completed and assets are sold off, a business can officially come to an end.
Of course, the steps proposed above are over-simplified, as the process of dissolving a business can be enormously complicated. This is why many Louisiana businesses turn to legal professionals. An experienced attorney can make sure that a business winds down in accordance with the law, and that the law is utilized to protect the business and the business owner as fully as possible. To learn more, consider reaching out to an attorney of your choosing.